Workforce training
57. The importance of workforce training is clear.
Several of our witnesses cited Lord Leitch's finding that 70%
of the 2020 workforce have left compulsory education and are in
the present workforce.[85]
Earlier in this Report, Diagram 1 showed that around half the
existing manufacturing workforce has qualifications below level
3 (two A-levels or equivalent), which is increasingly becoming
the base line for employability. As noted at the beginning of
this chapter, this has major implications both for employers looking
for workers and for workers seeking new positions.
58. The Trades Union Congress argued strongly that
insufficient training is taking place to meet the challenges.
They said: "In this country one in three employers, despite
the fact that they have a fair bit put on a plate for them, for
example by Train to Gain, still do not participate in the training
of their workforces. Too many workers never get trained at all."
The Trades Union Congress told
us that the key to getting employees interested in training is
to provide workplace training in paid working time.[86]
Their argument is for a statutory right for employees to be
able to train for a level 2 qualification in work time—a
proposal that the Leitch report has recommended should be implemented
if sufficient voluntary progress is not made by 2010.[87]
We agree.
59. The view of two of the main employers' groups—the
CBI and EEF—is that the private sector invests a substantial
amount of money in training—£33 billion across the
economy as a whole. Indeed, the CBI told us that, as a proportion
of the wage bill, UK employers spend more than their international
competitors.[88] This
was reinforced by the EEF's evidence, which cited research showing
that "UK employees are among the most trained in Europe."[89]
Their position was that the returns on that money were often poor
owing to issues including lack of appropriate training courses
and insufficient strategic vision in applying training budgets.[90]
Until better returns on training could be guaranteed, the CBI
accepted that many employers would remain disengaged from training
their staff.[91]
60. The evidence we received suggests that, on balance,
manufacturing employers train their workforce to a lesser extent
than employers in the UK economy more widely. According to the
Skills for Business Network, 59% of manufacturing employers funded
or arranged training for employees in the last year, compared
to 65% for the economy as a whole; this accounted for 55% of the
workforce compared to the national average of 70%.[92]
Companies who do not train their staff are, perhaps unsurprisingly,
those with a smaller number of employees. Only 39.2% of manufacturing
companies with 2-4 employees trained their staff in the last year
compared to 74.4% of companies with 10-24 employees, 86.3% of
those with 25-49 employees, and 91.5% of those with between 50-99
employees.[93] This echoes
the evidence we received that medium and large companies in the
UK often have a very good record on training, but there is increasing
concern about the lack of training in their supply chains.[94]
We note, however, that when it comes to the percentage of a company's
workforce that is trained, large employers actually have a marginally
worse record than their smaller counterparts in the economy as
a whole.[95]
61. The manufacturing
sector trains a lower proportion of its workforce than the economy
as a whole. Estimates of the proportion trained vary, but the
evidence suggests between one half and two-thirds of the workforce
do receive training funded or provided by their employer. Companies
who do not train their staff are overwhelmingly those with fewer
than 25 employees. The Government should therefore focus its assistance
on small employers to help them to begin training their staff
and should consciously reach out to smaller firms. Government
should also be encouraging larger employers to train a higher
proportion of their staff and spread best practice through their
supply chains. In both cases, a close link between training and
business strategy should be encouraged.
62. We should be careful not to portray employers'
or learners' views of the training industry as entirely negative.
Learning and Skills Council figures show that learner satisfaction
with further education and work-based training courses is high—with
90% or higher of those taking courses 'satisfied' or better with
their progress.[96] Likewise,
National Audit Office figures show 79% of employers are satisfied
with their experience of the training industry.[97]
Many of our witnesses told us of examples of good practice and
initiatives which they saw as being successful or having potential
across the sector. These included the work of Union Learning Representatives,
the efforts to retrain staff following the closure of MG Rover
in Longbridge, the Productivity and Competitiveness Framework
being trialled in the West Midlands and the involvement of large
and successful firms in promoting training down their supply chains
through the Automotive Academy and subsequently the National Manufacturing
Skills Academy.[98]
63. Our witnesses suggested that most post-16 training
is carried out in the workplace and that most employers prefer
in-house training or externally sourced training on the premises
to further education colleges or other publicly funded sources
of training.[99] Improve
informed us that in their sector 85% of training is "on the
job" and only 7% is sourced through further education colleges.[100]
For the economy as a whole, the CBI told us that less than 5%
of employers' spending on training is spent in further education
colleges even though around 18% of employers engage with such
institutions.[101]
In their analysis of the sector, KPMG linked this preference for
workplace training over public sector providers with the problems
of complexity, variable quality of courses and lack of up-to-date
machinery and tuition that we have identified elsewhere in this
Report.[102] Similarly,
the CBI argued that publicly provided training was variable in
its quality and relevance to the employers' business and often
was delivered in a way that was unhelpful to business—for
example taking place at the wrong time of day and being unavailable
during academic holidays.[103]
According to the CBI, in-house training undertaken by employers
is often not accredited—even when it is of high quality.[104]
64. Employers
have strongly expressed their preference for 'on the job' training
in the workplace. Public sector skills providers would be well-advised
to 'go with the grain' of employers' strongly held convictions
and aim to facilitate this where possible in return for a commitment
by employers to provide paid time for employees to undertake training.
Government, the National Skills Academy for Manufacturing and
Sector Skills Councils should work towards a form of national
accreditation for in-house training that recognises its value
and establishes common standards at a basic level without being
prescriptive as to its exact content or method of delivery.
65. An EEF survey
showed that the two largest obstacles to training for employers
are lack of funding and unwillingness or inability to give staff
time off to train. These were followed by lack of relevant courses
and staff reluctance.[105]
The National Employer Skills Survey tells a different story, with
the overwhelming majority of employers (75.2%) who do not train
their staff saying they did not do so because their staff were
already fully proficient.[106]
As shown above, it is the smallest companies that are least likely
to provide training for their workforce. Employers' groups have
told us that small and medium sized companies find it difficult
to spare staff time—especially that of managers—for
training, and cite the disproportionate costs of funding training
in a small firm. They also said that small firms had much more
significant difficulties in finding relevant training, because
of the need for staff to fulfil flexible roles in the company
and difficulties in engaging with the education system.[107]
66. The evidence we received from the Learning and
Skills Council and the two Departments suggested that employers'
preference for workplace training was being recognised and improvements
were being made in this area. In particular, all three parties
stressed the importance of the Train to Gain brokerage system
as a mechanism for proactively engaging employers by linking skills
improvements to the specific demands of their businesses.[108]
Our witnesses broadly supported the Train to Gain approach.[109]
However, they noted a number of issues which will need to be resolved
if it is to reach its full potential. The two most important of
these were the need to establish a single, coherent brokerage
system for the entire country, to prevent employers based in several
regions having to deal with different systems in each one; and
improving the relatively low level of additional training 'around
10%-15%' generated by the Employer Training Pilots (ETP, the forerunner
of Train to Gain)—that is, 85% to 90% of the training would
have taken place anyway, if ETPs had not existed. This is sometimes
referred to as 'deadweight'.[110]
The latter is particularly important in view of the CBI's evidence
that the Small Firms' Initiative—run by the Learning and
Skills Council and Business Link—had achieved 90% additional
training.[111] The
Minister for Higher Education and Lifelong Learning and the Learning
and Skills Council both assured us that this was successfully
being addressed, citing high levels of employer satisfaction and
small business engagement.[112]
We note that no survey directly comparable with the ETP evaluation
has yet been carried out.
67. We welcome
the Train to Gain approach of actively targeting firms to identify
and address their specific skill needs and we endorse Lord Leitch's
proposal of a similar approach for individuals. We believe that
Train to Gain should continue its focus on smaller firms, with
the aim of promoting training among companies that do not at present
train their staff. We also recommend that a nationally coherent
system of brokerage be established as soon as possible.
Apprenticeships
68. The number of Apprenticeship places has been
increasing, from 219,500 in 2003 to 255,000 in 2005.[113]
Around a third of these places are in manufacturing.[114]
Completion rates have also been increasing, albeit from a low
starting figure. 27% of apprentices completed their programme
in 2002/03 compared to 53% in 2005/06. Encouragingly, completion
rates are higher in manufacturing than among apprentices in general.[115]
69. The Minister for Higher Education and Lifelong
Learning told us that: "Apprenticeships are a key part of
the way forward. What we have to ensure is that this is demand
driven from the employer and not supply driven because otherwise
you run the risk of people getting on to an Apprenticeship and
then getting to the end of that programme, not being able to access
a job."[116] He
went on to say that many young people dropped out of Apprenticeships
to take up jobs elsewhere, and that the key to ensuring high completion
rates should be focusing on the benefits received at the end of
the programme by closely linking the skills and qualifications
gained from the Apprenticeships to employer demand.[117]
70. We welcome
the improvements in the number of Apprenticeship places and completion
rates. The Government should work towards the Leitch report target
of 500,000 apprentice places by 2020 but only insofar as this
reflects genuine demand in the labour market and the varying needs
of specific industries. Government workforce planning, even for
its own workforce, can leave a lot to be desired; as we have seen,
for example, with the problems concerning the excess numbers of
nurses and doctors recently trained (c.f. Modernising Medical
Careers).
71. We note
that the concerns raised regarding vocational qualifications extend
equally to the NVQ element of Apprenticeships and Advanced Apprenticeships.
With the skills base line for employability in the sector rising,
Government should make the accreditation of Apprenticeships more
robust and relevant to the needs of the industry by including
them within the Sector Skills Council-led process for developing
and approving vocational qualifications discussed earlier in this
Report.
72. The Learning and Skills Council has announced
that 8,000 Apprenticeship places will be funded for the over-25s,
starting from August this year. They will be targeted at those
without employment, those seeking to go into careers that are
atypical for their background and those seeking to build upon
qualifications achieved through Train to Gain in priority areas
for their sector or region.[118]
In view of the importance of increasing the skill levels of the
existing workforce and in the light of the finding of our predecessor
Committee that women are more likely to try and break into a traditionally
male-dominated sector after several years in the workforce, we
welcome the extension of Apprenticeships to over-25s as a major
step forward.[119]
48 HC Deb, 8 February 2007, col. 974 Back
49
Qq 137-138; National Audit Office, Employers' perspectives
on improving skills for employment, (2006) Chapter 2; (hereafter
'NAO report) Reducing operational costs was identified as the
major strategic priority for employers by the EEF, Skills for
Productivity, (2006) Chart 1; Q 250 Back
50
Qq 76 and 194 Back
51
Q 572 Back
52
Q 637; Appendix 17 (DTI); Leitch, para. 50-58 Back
53
Q 581 Back
54
Qq 10-13, 139 and 307-308; Back
55
Appendix 35 (Metals Forum) Back
56
Appendix 3 (ABPI) Back
57
Q 594 Back
58
NAO report para 29-30 Back
59
Appendix 24 (Federation of Small Business); Leitch para 3.16 Back
60
Q 605 Back
61
Chartered Institute of Personnel and Development, Who learns
at work?, (2005) p. 14 Back
62
Q 241; similar views were expressed by the EEF (Q 49), TUC (Q
93), Amicus (Q 191) and in much of our written evidence. Back
63
Leitch, para 4.7; Sir Andrew Foster, Realising the Potential:
A Review of the Future Role of Further Education Colleges (2005),
para 92 Back
64
Appendix 21 (EEF) Back
65
Appendix 8 (BPIF) Back
66
Qq 307 and 669 Back
67
Q 311 Back
68
Appendix 14 (DTI) Back
69
Q 664; This view was supported by the Learning and Skills Council,
Q 309. Of our witnesses, only the EEF proposed major structural
reforms to the skills system, Appendix 21 (EEF). Back
70
Appendix 14 (DTI); Qq 310 and 618 Back
71
Q 664 Back
72
Q 281 Back
73
NESS, 2005 using http://researchtools.lsc.gov.uk/ness, Main causes
of having a hard to fill vacancy (summary) by Sector Skills Council. Back
74
Dr Andy Dickerson, A study on the rates of return to investment
in level 3 and higher qualifications, Warwick Institute for
Employment Research, (2005) Figure E1 Back
75
Q 139 Back
76
Q 27 Back
77
For example, Q 281 (Improve) Back
78
EEF, Learning to Change, p. 15 Back
79
Q 314 Back
80
Q 76; Amicus also made the same point, Q 194 Back
81
Q 281 Back
82
Q 315 Back
83
Leitch, para 4.27 Back
84
Q 658 Back
85
Leitch para 31 Back
86
Q 72 Back
87
Q 71 Back
88
Q 153 Back
89
Appendix 21 (EEF) Back
90
Q 6; EEF, Learning to Change, 14; Q 153 Back
91
Q 137 Back
92
Appendix 42 (Skills for Business Network); www.ssdamatrix.org.uk Back
93
NESS, 2005 using http://researchtools.lsc.gov.uk/ness, Whether
establishment has funded or arranged either on-the-job or off-the-job
training over the past 12 months by size of establishment (nine
coded categories), all manufacturing Sector Skills Councils; whole
economy figures are given in Appendix 13 (DfES). Back
94
Qq 146 (CBI) and 674 (DTI) Back
95
Appendix 13 (DfES); sector specific figures were not available. Back
96
Learning and Skills Council, National Learner Satisfaction
Survey: Highlights from 2004/05, (2006);Q281; Appendix 14
(Society of British Aerospace Companies); Appendix 28 (KPMG) Back
97
NAO report p. 26 Back
98
Appendix 48 (TUC); Appendix 4 (Birmingham Chamber of Commerce);
Appendix 45 (SMMT); Appendix 31 (Learning and Skills Council) Back
99
Q 138 (CBI); Appendix 8 (BPIF); NAO report p. 26 Back
100
Q 283 Back
101
Q 157 Back
102
Appendix 28 (KPMG) Back
103
Q 157 Back
104
Q 153; CBI Press Release, 23 April 2007 Back
105
Appendix 21 (EEF) Back
106
NESS, 2005 using www.researchtools.lsc.gov.uk/ness, Reasons for
not providing training at all over the past 12 months, all manufacturing
Sector Skills Councils. Back
107
Qq 146-147; Appendix 24 (Federation of Small Business); Appendix
23 (EAMA); Appendix 8 (British Printing Industries Federation) Back
108
Qq 315,317, 600 and 666; Appendix 14 (DTI) Back
109
Qq 20, 139 and 307; Appendix 10 (CBI); Appendix 24 (Federation
of Small Business) Back
110
Appendix 28 (KPMG); The Institute for Fiscal Studies, The Impact
of Employer Training Pilots on the take-up of training among employers
and employees, (2005) p. 11 Back
111
Q 146 Back
112
Qq 317, 347 and 602 Back
113
Department for Education and Skills, Annual Report 2003
p. 107 and Annual Report 2005 p. 47 Back
114
Q 616 Back
115
Learning and Skills Council, Further Education and Workplace
Learning for Young People - Learning Outcomes in England 2002/03,
(2004); HC Deb, 27 February 2007, Col.1397W Back
116
Q 616 Back
117
Qq 622-628 Back
118
HC Deb, 19 Mar 2007, Col. 679W; Appendix 31 (LSC) Back
119
Jobs for the girls: The effect of occupational segregation
on the gender pay gap. Sixteenth Report of Session 2004-05,
HC 300, Para 22 (hereafter 'Jobs for the Girls') Back
